3D Sound - no rolloff?
A more detailed documentation on the 3D sound options you find in the Wiki on Sound Actuator it illustrates the meaning of the cone and all the options.

A older post mentions that 3D sound only works with mono (WAV) files. if this still applies you could convert your sound with a tool like Audacity.

I edited the file from the post mentioned above and needed to adjust some values in order to hear anything and uploaded it here.